Factors that shift the IS curve involve:
A) interest rates and levels of GDP.
B) the quantity of money and the demand for money.
C) the trade balance.
D) exogenous variables affecting demand, such as a change in government spending or a change in the exchange rate.
Ans: D) exogenous variables affecting demand, such as a change in government spending or a change in the exchange rate.
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a. True b. False Indicate whether the statement is true or false
Disinflation can be explained by the Phillips Curve analysis as resulting from a situation where the actual rate of inflation is initially less than the expected rate, causing the unemployment rate to:
A. Rise temporarily, but consequent decreases in nominal wages will eventually bring the actual and expected rates of inflation into balance B. Rise temporarily, but consequent increases in nominal wages will eventually bring the actual and expected rates of inflation into balance C. Fall temporarily, but consequent increases in nominal wages will eventually bring the actual and expected rates of inflation into balance D. Fall temporarily, but consequent decreases in nominal wages will eventually bring the actual and expected rates of inflation into balance